Over the past 15 years, hedge funds have struggled to remain competitive amid lackluster or even tumbling returns, which caused many to drop the traditional 2/20% model for management and performance fees. In fact, hedge fund fees have been declining steadily over the last decade and a half.
Unfortunately, while a recent study suggests those fee declines may have stabilized, the industry’s most important clients are dumping their hedge fund allocations. Meanwhile, the cream of the crop of hedge funds is charging significantly higher fees — even higher than the traditional 2/20% model.
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